Tourism and Hospitality Management, Vol. 23, No. 1, pp.

105-117, 2017
M. Laškarin Ažić: THE IMPACT OF HOTEL EMPLOYEE SATISFACTION ON HOSPITABILITY ...

THE IMPACT OF HOTEL EMPLOYEE SATISFACTION

ON HOSPITABILITY PERFORMANCE

Preliminary communication
Received 5 July 2016
Marina Laškarin Ažić Revised 16 July 2016
9 March 2017
Accepted 10 March 2017
https://doi.org/10.20867/thm.23.1.8

Abstract
Purpose − The hospitality industry is characterized by the complexity of managing guest
experiences, which forces human resources managers to find new ways of managing
relationships with employees and guests. Good relations in an organization (often displayed by
organizational culture) are the main incentive for stimulating positive behavior among
employees. The purpose of this paper is to examine factors related to employee satisfaction and
hospitality in order to understand positive behavior in organizations.
Design – Regarding the theory assumptions, the research tests premises about causal relationship
between exogenous (3 types of satisfaction inside the organization) and endogenous variables
(employee hospitality).
Methodology − For the purposes of this paper, quantitative research methods were applied to a
sample of 266 questionnaires filled out by the participants of a training program organized by the
Association of Employers in Croatian Hospitality (AECH). Firstly, Exploratory Factor Analysis
extracts four factors which represent four main latent variables. Results from the EFA are also
tested using Confirmatory Factory Analysis. CFA specifies how well measurement variables
represent a specific concept. Subsequently, structural equation modelling (SEM) is applied to test
the structural connection between concepts and to define which concepts are interconnected in
order to help understand the nature of those connections.
Findings − this study shows the importance of satisfaction with management relations and
coworker relations and their joint influence on overall job satisfaction and hospitality (positive
behavior inside the organization)
Originality of the research − Findings should be useful for hotel managers who aim to improve
their relations with frontline employees and increase productivity.
Keywords Job satisfaction, hospitality, employee – management relations, coworker relations

INTRODUCTION

As one of the main goals in everyday hotel practice, profitability is often identified as
organizational success. However, a goal set as universally and ideally as that,
represents only a generalization of other important organizational factors, which cause
the realization of that goal (which would be impossible in their absence). One of those
significant influencing factors is employee satisfaction. Authors Heskett et al. (1994)
proposed their service profit chain, which explains that profit and growth are stimulated
primarily by customer loyalty as a result of customer satisfaction. Furthermore,
satisfaction is influenced by the value of services, which is created by satisfied, loyal
and productive employees.

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Regarding the circumstances which shape the hotel industry today, such as high labour
intensiveness, constant human interaction, dependence on other colleagues (Galičić &
Laškarin, 2016) managing employee satisfaction in the hotel industry compared to
other industries represents the most critical point of hotel management.

Diverse scientific literature and practical examples demonstrate the importance of

employee satisfaction and its causal connection to job performance (Brayfield &
Crockett 1955; Naylor, et al. 1980; Testa, et al., 1998; Judge, et al. 2001). This
relationship has been described as “Holy Grail” of industrial psychologists (Landy,
1989). Although there is a significant amount of research where employee satisfaction
has been examined by means of numerous motivational factors, the research is lacking
in studies which distinguish types of positive employee behavior.

According to Bakker & Schaufeli (2008), positive organizational behavior (POB)

studies are, in one way or the other, related to employee well-being or performance
improvement. In order to explain positive behavior, organizations should realize that
employee behavior is also often manifested outside the organization. For example,
employees who are proud of working in a hotel “XY”, also tend to share their positive
thinking outside the organization. Unlike outside the organization, internal behavior is
controllable and thus more appropriate for analyzing. Positive organizational behavior
is described by the Luthans (2002) as the study and application of positively oriented
human resource strengths and psychological capacities that can be measured,
developed and effectively managed for performance improvement in today’s
workplace. Practice and research often focus on negative aspects of organizational
behavior. Luthans (2002) explains it as “we are more concerned with what is wrong
with organizations, teams, leaders than what is right with them”. Like positive
psychology, positive organizational behavior doesn’t bring new discovery of the
importance of positivity, but emphasizes the need for more positive traits, states and
behaviors in organizations (Luthans & Youssef, 2007). Positive behavior inside
organization is not only the proper way of serving guests but also the only way in
which hospitality organizations could develop healthy relationships with guests in the
long term.

Research are also directed toward employee satisfaction as a main cause of guest
satisfaction (Bach & Milman, 1996). Some authors pursued a deeper understanding of
guest satisfaction. For example, author Kuo (2007) researched employee attitude and
its connection to tourist satisfaction. The fact that the only way to provide guests with
added value is by maintaining an honest relationship with the guest also highlights the
importance of positive behavior. Moreover, employee hospitality is the common
denominator of all benevolent relations characterized by willingness to meet and
understand the guests. Positive behavior inside the organization in this research will be
described through three key aspects: relationship with coworkers, relationship with
guests and employee – management relationship (Ivanović & Galičić, 2006).

The main purpose of this paper is to examine three types of satisfaction (job
satisfaction, satisfaction with management relations and satisfaction with coworker
relations) in order to understand the nature of their relationship with employee
hospitality. The paper is structured in three main sections. First section, discuss about

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theoretical assumptions of employee management relations and employee hospitality.

Methodological approach is the title of the second section where research methods are
presented. Third section “results” presents empirical findings. In conclusion author
summarizes research results and brings new ideas which could help to improve
relations with employees and guest experience.

1. THEORETICAL FRAMEWORK

Any modern hotel setting depends on its intangible assets which can be viewed as
employees’ know-how and skills. Apart from the studies of customer satisfaction,
employee satisfaction has been thoroughly examined by experienced researchers. Their
research shows a significant positive relationship between employee satisfaction and
financial performance (Chi & Gursoy, 2009; Koys, 2003). Authors Chi and Gursoy
(2009) found that the relationship between employee satisfaction and financial
performance is mediated by customer satisfaction. Some authors consider guest
satisfaction to be the most important endogenous variable in studies of employee
turnover (LaLopa, 1997; Mobley, et al., 1979; Salzar & Hubbard 2000) and indirect
impact on profitability (Chi & Gursoy, 2009; Koys, 2003).

Yang (2010) indicated that there are influencing factors on job satisfaction in the
hospitality industry such as role conflict, burnout, socialization and work autonomy.
Authors Slatten & Mehmetoglu (2011) have found a positive relationship between
autonomy, strategic attention, role benefit, and employee engagement. Those studies
show a direct and indirect correlation between employee retention and customer
retention, and their joint influence on organizational effectiveness and efficiency.

1.1. Employee Management Relations

The hotel industry in Croatia is still feeling the consequences of the recession due to
insufficient support by the Croatian Government, which also negatively influences the
investment process and businesses inside the hotel. In such an unsafe investment and
working conditions, working capital is usually considered the first choice for cost
reduction. Hoteliers (especially small hotels) then turn to the easiest solution by cutting
the costs intended for employee training, education, bonuses, or payrolls. Instead of
traditional organizational structures that heavily rely on management control and
economic principles of cost reduction, efficiency, and cash flow, the focus in modern
organizations is on the management of human capital (Bakker & Schaufeli, 2008).

Another problem closely connected with employee hospitality is the issue of high
employee turnover rates which is manifested as the inability to hire people for the
whole year (tourism seasonality). Those problems are highly reflected on hotel
business, and there is only a small possibility for hotel managers to influence this with
their skills and knowledge. The only valid way to reduce the high turnover rate is by
introducing methods that will encourage employees and by promoting a highly
respected organizational culture. Thus, positive managerial influence is displayed by
establishing good relations between employees using various motivation techniques.

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Managers who show high levels of supervisory support behavior make employees feel
understood, valued, and cared about (Kang., et al., 2014).

According to literature from the field of psychology, empowerment is viewed as a

motivational technique for building trust in organizations (between managers and
employees). The main purpose of empowerment accomplished through work
delegation is to create a positive working atmosphere in an organization. Letting
employees “call the shots” allows them to feel “ownership” of the job; they feel
responsible for it and find the work meaningful (Salazar & Pfaffenberg, 2006). That is
to say, the smaller the possibility of controlling the workers, the higher the necessity to
have a trusting relationship with employees. Some authors see organizational culture
and leadership as an influencing employee empowerment (Christensen-Hughes, 1992;
Conger & Kanungo, 1988) which is another perspective of employee performance and
culture.

Although there is undoubtedly a high influence of management on employee

motivation and satisfaction, the importance and impact of correct management
organization behavior is still unexplored. Proper organizational behavior represents the
qualifications of the manager, which are manifested as honesty, competitiveness,
organization and timeliness.

In an ideal hypothetical situation, by transposing their knowledge and experience,

managers positively influence employee satisfaction, and thereby, everyday
performance quality. However, practice often shows a reverse process in which
employees do not gain organizational values from the supervisor and are still expected
to show ideal organizational behavior. In that situation, the chain of trust (employees–
managers) is broken, which directly impacts the (non)quality of their hospitality.

1.2. Employee Hospitability

Strategic thinking in creating new individual services or entire hotel products must be
based on a prior presentation of organizational culture to the hotel employees. Once the
employees have completely embraced the idea of the purpose of their services and
organizational concept, it is realistic to expect that they will be able to convey their
satisfaction to the guests, i.e. the ultimate consumers of the services. Otherwise, if
employees a priori do not accept the organizational culture as being beneficial to their
interests, the front line employees’ presentation and sales of services is likely to be a
failure.

Teng and Chang (2013) define employee hospitability as “customer perceptions of

employee characteristics of hospitality during the service encounter and the guest-host
interaction”. They also point out that task performance and hospitability performance
are different in their outcomes. For example, employee’s task performances enable
guests to benefit functionally, while their hospitability performance makes them to
react emotionally. Lee & Way (2010) point out that a work environment where
employees can achieve a feeling of satisfacion can be linked to quality of service and
retaining quality employees. When employees know what is expected of them, they are
more likely to meet role obligations and are more satisfied with their job (Bowen &

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Schneider, 1985). Furthermore, employee attitudes and opinions about their colleagues
and the work environment may make all the difference between workers' merely doing
a good job and delivering exceptional guest service (Arnett, et al., 2002).

In order to achieve excellence (as perceived by the guest), service should be viewed as
the performance of a worker. Employees share the feeling of pride and satisfaction at
the same moment they deliver the service ordered by the guests. Each conversation
with the guest is one “moment of truth” when guests evaluate the value for money
relation. In Croatian hospitality there is a rare practice of a commonly developed
understanding of such moments of truth. The concept of “moment of truth” was
popularized by the Scandinavian Airline System (SAS) in the early 80’s. Each of their
10 million customers came in contact with approximately five SAS employees, and that
contact lasted an average of 15 seconds each time. These 50 million “moments of
truth” are the moments that ultimately determine whether SAS will succeed or fail as
company (Angelo & Vladimir, 2011). Consciousness about these moments of truth
often leads to a higher quality of service atmosphere in hospitality establishments.
Because the moment of truth is one of the key moments, management should pay more
attention to those moments especially when planning human resources and their
processes.

Pride is another crucial emotion which entices positive employee behavior regarding
their relationship with guests. Pride in the organization results from specific
perceptions of the organization and from experiences with that organization (Arnett, et
al., 2002).

The idea of what kinds of skills an organization wants from its employees occurs when
organizations realize what kind of mood or feeling they want to achieve. The
combination of two factors - ambience and employees creates an atmosphere in a
specific space. In that respect, emphasis is placed on employees who have greater value
in creating a specific mood. Beautiful architecture and décor cannot provide the desired
feeling without the character of the employees. The whole hotel experience is the result
of each employee and their interaction with other employees at meeting points.

On the basis of this discussion, this study proposes the following three hypotheses:
1. There is a significant and positive relationship between satisfaction with
management relations and job satisfaction.
2. There is a significant and positive relationship between satisfaction with coworker
relations and job satisfaction.
3. Job satisfaction is positively related to employee hospitality.

2. METHODOLOGICAL APPROACH

For the purpose of this paper, the questionnaires were distributed to the service staff
(professions: waiter, barman, reception clerk, sales officer, hotel housekeeper) during
the training program (from 4th of October to 10th of November 2015) in four tourist
destinations. Questionnaires were distributed to all participants. In total, data were
collected from 266 hotel employees (197 female, and 69 male respondents).

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Questionnaire used in research can be divided into 5 sections. The first section
comprised questions related to socio-demographic characteristics (age, gender, job title,
qualification). The remaining four sections measure employee perceptions of
dependency in service quality and hospitality, regarding factors such as satisfaction
with management relations, training programs, satisfaction with coworker relations and
overall satisfaction. Items that were used to assess employee perception were measured
on five point Likert type scale (from 1= strongly disagree to 5=strongly agree).

Four items adopted from Janssen (2008) were used to measure employee hospitality. A
sample item is “I create new ideas for difficult issues”. Satisfaction with coworker
relations in this research originate in part from Spector (1997). The respondents were
asked to indicate the extent to which these characteristics were associated with them.
For example, “I enjoy work with my coworkers”. The items used for the section
satisfaction with management relations were from (Schmidt, 2007; Liu et al. 2008;
Spector, 1985) and slightly modified to fit this research. The measurement items for
Job satisfaction were adopted from previous hotel employee satisfaction surveys (Kim
& Jogaratnam, 2010; Salzar & Hubard, 2000; Lyons 1971). A sample item is
“Considering your job as a whole, how well do you like it?”

Table 1: Exploratory Factor Analysis

Factor % of Cronbach's
variance Alpha
EH SMR SCR JS
Guest understanding 0.994 38.442 0.967
Usefulness 0.943
Hospitable 0.934
Satisfaction with management 15.887 0.848
0.981
relations
Satisfaction with management
0.948
competencies
Managers entice positive
0.628
organizational culture
Regular briefing by the managers 0.597
Working as equal team member 0.862 10.702 0.742
Satisfaction with team work 0.678
Satisfaction with working
0.548
atmosphere
Satisfaction with current job 0.782 9.162 0.699
Intention to keep working 0.607
Satisfaction with salary 0.594
Extraction Method: Maximum Likelihood. Rotation Method: Promax with Kaiser Normalization. a.
Rotation converged in 5 iterations.

In order to uncover the structure of the model and relationship between factors and
variables, exploratory factor analysis was applied. Results from the exploratory factor
analysis revealed four main latent variables (table 1).

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Cumulative percentage for the 1st factor is 38.444%, the second 54.328% and the third
65.031%. Suitability of data was tested using Kaiser-Meyer-Olkin Measure of
Sampling Adequacy. The value of KMO test (0.810) is high and it indicates a sufficient
number of variables presented by one factor. Factor loadings greater than 0.5 were
consider acceptable for the construct. There is also a high correlation between factors
and variables which can be readout from Bartlett's Test of Sphericity (x2 2717.420,
df=153, sig.=0.000). Results clearly indicate significant data correlation suitable for
further factor analysis.

Goal is to confirm that the abovementioned factors (latent variables) are positively
connected in logical order shown in figure 1. After preforming CFA it is recommended
to drop any variables that do not significantly load on factor, and then re-estimate a
new, non-nested model (Ullman, 2006), figure 1.

Figure 1: The Hypothesis model

1. Satisfaction with
management
relations
H1 H3
4.Employee
3. Job satisfaction
hospitality

2. Satisfaction with H2
coworker relations

Source: author

In order to ensure a positive and valid way of measuring latent variables, Confirmatory
Factor Analysis (table 2) was applied to explain how well measurement variables
represent the model. The constructs were tested using the software AMOS 21 with the
maximum likelihood (ML) method of estimation. Exogenous and endogenous variables
in the model were assessed by a collection of measures. Firstly, to assess the validity of
the measurement model it is necessary to examine model fit and validity of constructs
(table 2).

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Table 2: Model fit indicators- CFA

Fitness index Values Recommended values

Cmin/df 1.111 1-3 (Byrne, 1994)
Df 59
Chi-square 65.542
P value 0.000
CFI 0.997 >0.93 (Byrne, 1994)
RMSEA 0.020 <0.080 (Hair et al., 2010)
PCLOSE 0.985 >0.050 (Hair et al., 2010)
RMR 0.035 <0.10 (Hair et al., 2010)
GFI 0.965 >0.90 (Byrne, 1994)
NFI 0.975 >0.95 (Schumacker & Lomax, 2004)
N=266
Source: author

According to the goodness of fit indices (table 2), the measurement model
demonstrates an acceptable degree of model fit and it is justified to conduct further
analysis. Prior to the examination of overall model fit, several tests are applied (table
3): composite reliability-CR, average variance extracted-AVE, maximum shared
variance-MSV, average shared variance-ASV and correlation (diagonal line).

Table 3: Reliability and correlation

CR AVE MSV ASV SCR EH SMR JS

Satisfaction with
coworker relations
(SCR) 0.754 0.509 0.132 0.095 0.714
Employee hospitality
(EH) 0.968 0.909 0.349 0.155 0.191 0.954
Satisfaction with
management relations
(SMR) 0.881 0.662 0.349 0.223 0.340 0.591 0.814

Job satisfaction (JS) 0.710 0.466 0.203 0.138 0.363 0.282 0.451 0.682
Source: author

The results show that average variance extracted for the latent variables exceeds the
squared correlations between latent variables (SCR, EH, SMR, JS) which provide
evidence of discriminant validity. Furthermore, in all cases the composite reliability
was above minimum threshold of 0.70 indicating acceptable reliability and internal
consistency. To assure convergent validity, AVE results for all three constructs should
be higher than 0.5 (Hair et al., 2010). In this analysis AVE values were above 0.5
except for job satisfaction. However, as this factor is minimally correlated with other
factors in the model and its composite reliability is higher than 0.7 it is admissible to
conduct structural equation modeling.

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Table 4: Model fit indicators – SEM

Fitness index Values Recommended values

Cmin/df 2.412
P value 0.000
CFI 0.966 >0.93
RMSEA 0.073 <0.080
PCLOSE 0.07 >0.050
RMR 0.087 <0.10
GFI 0.926 >0.90
NFI 0.944 >0.90
N=266
Source: author

Structural equation modeling was performed to test structural connections between

relationships. Eight measures – model fit indicators were used to assess the model’s
overall goodness of fit. After satisfactory results (table 4), the model was tested to asses
causal relationship by specifying direct pats between constructs (table 5).

Table 5: Standardized estimates - structural equation modelling

t-
Standardized estimates C.S.E. S.E. P
value

Satisfaction with management Job

 0.47 0.051 9.160 ***
relations satisfaction

Satisfaction with coworker Job

 0.28 0.066 5.335 0.003
relations satisfaction

Job satisfaction  Hospitality 0.41 0.082 7.256 ***

If a factor is loaded with absolute (t-value >± 1.96), (p>0.05) it would be eliminated from the model.
***
P<0.001
Source: author

3. RESULTS

Four hypotheses were tested to indicate direct and indirect relationships between
constructs. The first hypothesis proposed a significant direct relationship between
satisfaction with management relations and job satisfaction. According to values in
table 5 (completely standardized a= 0.47; t-value= 9.160), the first hypothesis was
supported. The second hypothesis (significant and positive relationship between
satisfaction with coworker relations and job satisfaction) was also supported
(completely standardized a=0.28; t-value= 5.335). The proposed relationship between
job satisfaction and employee hospitality was also found to be significant (completely
standardized b=0.41; t-value=7.256). Therefore, third hypothesis was supported.

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In order to explain chain of causation the study includes mediation test: direct without
the mediator, direct with mediator, and indirect relationship. Mediation effect of job
satisfaction was tested using the causal approach by Baron and Kenny (1986).

For the first relationship (satisfaction with management relations − job satisfaction −
job hospitality) mediation test showed significant mediation of job satisfaction between
satisfaction with management relations and employee hospitality (β= 0.519, p<0.05).

Results for the second relationship (satisfaction with coworker relations−job

satisfaction–job hospitality) also indicate significant mediation (β= 0.474, (p<0.01).

CONCLUSION

One of the main goals in this study was to test premises about a causal relationship
between satisfaction with management and coworker relations as exogenous variables
and job hospitality as endogenous variable, mediated by job satisfaction. Study also
explores three major direct relationships and two indirect relationships. According to
the results, all parameters are positive which indicates positive connections between
variables matched with the proposed hypotheses.

Arnett et al. (2002) claimed that employees who evaluated managers positively tended
to be satisfied with their jobs. Findings in this research also indicate importance of job
satisfaction in similar way. Namely, results imply that employee satisfaction with
management relations has a direct impact on job satisfaction and indirect impact on
employee hospitality (mediated by job satisfaction).

This research indicates that there is a direct relationship between employee satisfaction
with coworker relationships and job satisfaction, but also an indirect relationship with
employee hospitality, mediated by employee satisfaction. Author Oshagbemi (1999)
also added satisfaction with co-worker behavior in the model of overall job satisfaction.
He revealed the importance of satisfaction with co-workers behavior as strong indicator
of overall job satisfaction.

Chi & Gursoy (2008) reported that satisfied employees are highly motivated to provide
good service to customers. According to Yang (2010) job satisfaction is a powerful
contributor to the affective commitment of individuals to their current organizations.
Findings in this research as well indicate that higher level of employee satisfaction
leads to a higher level of all types of positive behavior inside the organization.
Employees who show satisfaction in their everyday job performance are more likely to
provide “service with a smile”, which will result in guests who are more satisfied. In
return, it will have a significant impact on repeated business and guest retention.

Employees who are in direct contact with guests have the unique opportunity to collect
all information about the satisfaction or dissatisfaction of the guest. Those employees
are the most credible source of information about guest satisfaction and with that level
od knowledge they represent most the respectable source of new ideas for the
organization. This research indicates that employee hospitality is a result of the

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succesful orgranizaton of all factors related with employees and their whole feeling of
working in a specific organization.

Guest expectations are another problem of hotel organization and management, which
emphasizes the importance of guest - employee relations. Guest expectations are rising
simultaneously with the number of guest visits. This means that with every following
guest arrival, the effort for meeting guest expectations is increased. Especially because
the guest already knows what kind of ambience they will see or feel. The employees’
attitude and willingness to understand the guest represent the only unpredictable factor
from the guest’s point of view.

This research is limited to examining relations of different satisfactory factors that have
an impact on positive behavior inside the organization. In this sense, important
financial aspects have been neglected. Although there is a possibility of an important
influence of satisfaction with the financial situation, the aim was to focus on relations
and hospitality without emphasizing the financial aspect. Future research should
include other types of positive behavior outside the organization, which will influence
the complexity of the model, but also provide better understanding of the whole
process of positive behavior. Furthermore, this research was conducted as transversal
research, which may be linked to a number of methodological problems such as
validity, reliability or causation. Thus, it is preferable to combine different data sources
(transversal and longitudinal).

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Marina Laškarin Ažić, PhD, Senior Assistant

University of Rijeka
Faculty of Tourism and Hospitality Management, Opatija
Department of Hospitality Management
Primorska 42, P.O.Box 97, 51410 Opatija, Croatia
Phone:+385-51-294886
E-mail: marinal@fthm.hr

Please cite this article as: Laškarin Ažić, M. (2017), The impact of hotel employee satisfaction on
hospitability performance, Tourism and Hospitality Management, Vol. 23, No. 1, pp. 105-117,
https://doi.org/10.20867/thm.23.1.8

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